China Holds LPR Steady for Fourth Straight Month

The People’s Bank of China (PBOC) kept key lending rates at record lows for the fourth consecutive month during the September fixing, in line with market expectations. The move followed the central bank’s decision to leave the seven-day reverse repo rate unchanged last Thursday. The decision came amid easing Sino-US trade tensions, even as growing signs pointed to a loss of momentum in China’s economy in August, alongside US monetary easing. The one-year Loan Prime Rate (LPR)—the benchmark for most corporate and household loans—was held steady at 3.0%, while the five-year LPR, which guides mortgage rates, remained unchanged at 3.5%. Both rates were previously cut by 10 bps in May. Economic data released last week showed that industrial output in August grew at its slowest pace since August 2024, while retail sales posted their weakest growth in nine months. Although new yuan loans rebounded in August after an unexpected contraction in July, lending came in well below expectations.